NODWIN Gaming, a subsidiary of Nazara Technologies focused on esports, has made a significant investment of INR 33.26 crore in Germany-based Freaks 4U Gaming GmbH through a convertible note. The investment was made by Nodwin Gaming International Pte. Ltd., a wholly-owned subsidiary of Nodwin Gaming Private Limited, which is a material subsidiary of Nazara Technologies. The convertible note is valued at EUR 3,600,000 and is intended to be paid in cash.
While both NODWIN Gaming and Freaks 4U Gaming GmbH are experts in marketing services for gaming and esports, their respective strengths lie in mobile and PC-based games. NODWIN Gaming is dominant in emerging markets like India, whereas Freaks 4U Gaming GmbH leads in developed markets. With this investment, NODWIN aims to enhance its expertise in PC games.
The collaboration between NODWIN Gaming and Freaks 4U Gaming GmbH is expected to make them more attractive to global consumer brands and game publishers, offering a seamless operation across emerging and developed markets.
Nazara Technologies further stated that if the conversion option of the convertible note is exercised, it will be converted into 7,366 shares at a future date. The percentage of shareholding will depend on the terms and conditions of the convertible note.
Convertible notes are a type of debt instrument commonly used by startups to raise capital during their early stages. They involve investors lending money to a startup with the intention of converting it into equity at a later milestone, often the next equity financing round.
Earlier this year, NODWIN Gaming had announced plans to raise $28 million (INR 232 crore) as part of a strategic funding round from new and existing investors. The company aims to utilize the fresh capital to expand and incubate new IPs as well as venture into new territories.
In addition to this investment, NODWIN Gaming has been actively pursuing acquisitions. It recently acquired a 51% stake in mediatech startup Branded in an all-cash deal worth $1.3 million. Last year, the company acquired a 35% stake in gaming accessories brand Wings for INR 10.01 crore and a 100% stake in licensed merchandising D2C brand Planet Superheroes in January 2022.
Nazara Technologies, the parent company of NODWIN Gaming, also raised fresh capital of INR 510 crore from investors including Zerodha’s Nikhil Kamath and SBI Mutual Fund. CEO Nitish Mittersain has stated that the company plans to invest the fresh funds in gaming studios capable of producing top-tier games tailored for both the Indian and global markets.
